How to get listed?

[Wolf]

Hello,

I am going to import a cosmetic product. I want to try to get it listed at stores like Clicks, Dis-Chem...

What is the best way to do it?

Please give me some input.

Thanks

[Dave A]

You'll be looking to get in contact with a buyer from the company. I'd phone their head office and ask to be put in contact with their buyer for cosmetic products. You shouldn't need to beat around the bush - it's their job to be aware of and investigate new products.

[Wolf]

That's the way I am doing it, so at least I know I am doing it right.

The thing is that I can't make a contract with the supplier overseas as long as I don't have a real deal. The initial order costs me 112.000 Rand. I just don't have the money to spend neither to risk.

My idea is that I can make a deal with a retailer BEFORE I have to make this order, then go to the bank, get a bridging loan (hopefuly), order the stuff and sell it.

Does this sound realisitc? The first deal is always the most difficult one. I know this product is outstanding and definitely the best one worldwide. It has proven it for the last 35 years. This company only started last year to develop international markets. in Germany, Austria and Switzerland it is extremely successful. I want a piece of this cake.

I contacted the merchandise manager of clicks already and he is going to have a look at it. Let's see what's gonna happen. Dis-Chem received my product proposal as well already. I am positive it's gonna work out.

[Dave A]

Originally Posted by ExoPacific

My idea is that I can make a deal with a retailer BEFORE I have to make this order, then go to the bank, get a bridging loan (hopefuly), order the stuff and sell it.

Does this sound realisitc?

Fortunes have been made on far flimsier deals. Ever looked at where the Onasis fortune came from?

Originally Posted by ExoPacific

The first deal is always the most difficult one.

Oh so right there. After that, everybody believes you can do it.

I just hope you've got some protection against the buyer going direct to the supplier.

[Wolf]

Originally Posted by Dave A

Fortunes have been made on far flimsier deals. Ever looked at where the Onasis fortune came from?

So true.

Originally Posted by Dave A

I just hope you've got some protection against the buyer going direct to the supplier.

Yes I am protected against that. The manufacturer is going to set up an exclusive contract. Till now it is only verbal but I am actually convinced he would refer any South African enquiry to me. He knows I am working on it already and it is just a matter of 1 or 2 more weeks till something is happening.

If everything is working without a delay the product is going to be published in the FMCG Newsletter and the Pick'n Pay Newsflash within the next 2 or 3 weeks. 18000 subscribers. I so hope that's gonna yield fruit.

[Dave A]

Here's to bold plans and the persistence to see them through

Well done

[Ann Williams]

No matter what time pressures you may be under, please, please DON'T go and cough up all of that money until you have your distribution rights contract signed and sealed.

The other thing... Seeing as you have a very tight budget, have you taken into account the costs to keep your products on their shelves - and all of the other costs of keeping your products in the major stores?

You may also need to look at your cashflow quite carefully when starting off as you may well not be paid for between 90 and 120 days.

[Vincent]

I've PM you a number of someone that may be able to help. He has been in this industry for a long-time. I think you should heed Ann's words with regards to cashflow and being paid 90 -120 days. Before you import, try and buy some samples to show your clients.

[Wolf]

Thank you Ann and Vincent,

The other thing... Seeing as you have a very tight budget, have you taken into account the costs to keep your products on their shelves - and all of the other costs of keeping your products in the major stores?

What costs are involved?

as you may well not be paid for between 90 and 120 days.

The information I got from major suppliers was that they pay within 30 days. But you never know.

I was thinking about buying the products even if Clicks and other companies don't want it because of any reason. I then would get sales reps to sell it to pharmacies and similiar shops. I am absolutely convinced about this products potential.

[johnnygirl]

hi ExoPacific,

i would be so cautious not to buy the product, unless you've sold it to a retailer first. i have a couple of years experience in the cosmetics industry, at retail level, and i have to warn you that MANY unknown/new cosmetics brands do not survive the South African market. for some reason, SA women do not experiment with cosmetics. consumers attach themselves to one or two brands for life. having said that: this is mostly true for skincare and fragrance, but as far as colour is concerned, they would be a bit more adventurous here. the point i'm trying to make, is that you shouldn't just purchase the product, unless you've already sold it.

if this brand is new to South Africa, surely your supplier could throw some financial support your way to market this brand properly.

i'm not sure if you know the culture of employing Beauty Consultants, but i'll explain it anyway: every cosmetics house have a Beauty Consultant at the counter where their product is sold. the cosmetics house (e.g. yardley, revlon, elizabeth arden, etc) pays half of the consultant's salary, while the retailer (e.g. Edgars, Foschini, etc) pays the other half of her salary. the consultant also receives regular training from the cosmetics house itself, as well as ongoing product knowledge & selling skills support. it is nearly impossible to sell a new brand of cosmetics without a consultant. is your supplier prepared to contribute to employing consultants, and will they be able to offer training?

the consultant is also the one responsible for re-ordering stock, in most instances. some retailers have tried a computer generated replenishment systems before, but due to the vast amount of sku's in a cosmetics counter + the small size of the items, data integrity was always a problem, which then caused havoc when it came to computer generated replenishment orders. so, for the most, the consultants will prompt replenishment orders. in other words, without a consultant to place replenishment orders for sku's that are running low on model stock, you will have a hard time establishing future replenishment orders.

gosh, i'm sorry i'm sounding very negative, but i would be so cautious if i were you, not to buy before you've sold.

ps: regarding the payment & settlement terms of retailers - they're obviously not all the same, but if you were to get 30 days from them, it would most definitely be at less 2.5%, or else at best 60 days net.